Currently, the buy-to-let market is facing a major headwind in the form of reduced mortgage interest tax relief, which will begin to be phased in from April 2017. This will mean that you cannot offset your mortgage interest before calculating your tax and will eventually have to pay tax on your whole rental income, rather than your final profit. From April 2016, buy-to-let investors must also pay a 3% stamp duty surcharge on their property purchase. The conditions are still favourable though, because there are too many tenants and not enough homes – an imbalance between supply and demand that means the risk of vacancy or void periods is low and the prospects for both rental hikes and capital growth is high. With all these factors in play it is more important than ever to choose your property’s location wisely too obtain the best yield available. Top 5 best rental yields in the UK are currently 1st Manchester 2nd Coventry 3rd Luton 4th Outer London and 5th Blackburn. Looking for properties in a University City can also without doubt help boost yields as these areas have an even greater demand. There are other measures that can be taken to help boost annual profits and incorporating your business is one that is recommended to explore. Property values after the Brexit vote seem to be holding steady and some areas are reporting small increases which is another very positive sign.
